Brooke MacDonald, 28, is an account executive at a public relations firm in Annapolis, Md.

Went cash-only: 1.5 years ago

My challenge: Managing unexpected expenses

After I got my first job out of college, I bought a house and a car and the expenses added up quickly. I was in an embarrassing amount of debt and would dread going to the mailbox. The bills would arrive and I would feel sick. But I still wanted to go out with my friends and buy fancy things for my house.

I eventually had an "Ah ha!" moment and decided I couldn't continue living that way. I wasn't in such a bad position that I was getting calls from my creditors, but I enrolled into a debt-management program. They helped me lower my interest rates and space out the due dates.

I went cold turkey one day and instead of using credit cards, I started to charge all my purchases on a debit card. I've cut my debt by about 20% in the last year and a half, and I expect to be completely debt free in another two years.

I really budget everything out, because I know planning ahead is my path to financial freedom. But sometime it can get sticky. It's cruddy when you have a big car service bill or want to travel.

My solution: I pay all my regular monthly bills and put some money into saving, and then see what I have leftover to do what I want with, which is usually about $600 each month.

I've known that I want to go to Los Angeles for the holidays for seven months, so I started saving for a hotel, a rental car and everything else back then.

For more spontaneous buys, I have a different system. If I decide I want to buy something, like a new outfit that costs $75, I set money aside for it for at least a week. If I decide it's still important to me after that period of time, I buy it.